Hecla to Acquire Three High-Grade Nevada Gold Mines 

COEUR D’ALENE, ID – Hecla Mining Company and Klondex Mines Ltd. reported that Hecla will acquire all the outstanding shares of  Klondex, a high-grade Nevada underground gold producer with its Fire  Creek, Midas and Hollister mines, through a plan of arrangement. Klondex’s Canadian assets will be spun out to its existing  shareholders. 

Under the Transaction, Hecla will acquire Klondex for consideration of  US$462 million with a mix of cash and shares of Hecla common stock and  the newly formed company (Klondex Canada).

“Opportunities to acquire significant land packages along  Nevada’s prolific gold trends are very rare. Rarer still are for these  land packages to have the highest grade mines in the U.S. and this  transaction is consistent with Hecla’s strategy of owning large  prospective land packages with mines where we can improve costs, grow  reserves and expand production,” said Phillips S. Baker, Jr., Hecla’s  President and CEO. “We structured the deal to use our excess cash  balances so our shareholders can benefit from the approximately 162,000  gold equivalent ounces a year of production while minimizing dilution.”   

Baker continued, “One of our core strengths is operating high-grade,  narrow-vein underground mines, and Klondex’s three operating mines –  Fire Creek, Midas and Hollister – are some of the highest-grade gold  mines in the world. After extensive due diligence, we see significant  opportunity to improve costs, throughput and recoveries over time with  our expertise. The combined approximately 110 square mile land position  offers the opportunity to make discoveries and grow the reserve base as  we improve our knowledge of the geology, something we have done at our  other operations. We expect this transaction to be accretive on many  important financial and credit metrics, with potentially significant  synergies. We are pleased that two significant Klondex shareholders have  committed to support this transaction, and look forward to welcoming  other Klondex shareholders to our company.”    “This transaction is an excellent outcome for Klondex and our  shareholders, delivering premium value and a clear pathway to develop  and optimize the Nevada mining assets and create further value in the  future,” said Paul Huet, Klondex’s President and CEO. “Hecla has a  proven track record of developing and optimizing mining assets such as  ours, and has a strong balance sheet that should help Fire Creek and our  other properties reach their full potential. Hecla operates a diverse  portfolio of some of the highest-grade mines in the world, and the  addition of our assets strengthens the portfolio further. We are  delighted to enter into this agreement and the Klondex board unanimously  recommends that Klondex shareholders vote in favor of this transaction.”